Nov 22, 2008

Business - Bollywood in recession ?

Gaurav Malani & Reshma Kelkar

The usage of the term recession has never been so common as it has been in the past few months. The younger generation might have theoretically Fear factor in Indian cinema

studied the syndrome in economics classes but are practically experiencing its effect only now. The recession has extended its range globally and India is no exception. While we keep reading about the market crunch across various industry sectors in the daily news, the Indian film industry, too couldn't evade its sting.

"While a worldwide recession has hit every business and industry at large, the Indian motion picture business felt it particularly hard because it has been long overpriced. Production, acquisition and talent salary costs had illogically shot through the roof with no commensurate returns for distributors sitting at the end of the value chain." remarks Tanuj Garg, Head - UK & Europe (International Marketing, Distribution & Syndication) at Studio 18.

But how is the recession affecting the movie world? Budding filmmaker Aniruddh Mitra explains, "The bad paymasters have got the opportunity to openly say 'no funds hence no payment', while the good ones are asking their unit members to charge less to reduce the price so that they can sell the films or at least find a buyer".

Though the crisis clearly carries negative vibes, some believe there could be positive outcome from the recession as well. "The bad side is the obvious i.e., workers not getting their dues, loss of work opportunities and some producers taking advantage of the crisis and faking no funds", says Mitra. "However the good part is that the bubble of over pricing would burst now and bring sanity to the budgeting of a film. Meaning, there is no justification in an artist getting Rs 64 cr for a film while the cinematographer has to be contended with Rs 20-40 lacs."

But hasn't the industry always been artist-oriented and our scripts been hero-bound? "The scene was always like this but has worsened in recent times. Picture this - an artist demands 7 cr after the success of his d├ębut film and sticks to his remuneration despite giving continuous flops thereafter. Where is the reward for hard work and consistency in our industry? Now if the overpriced artists charge less, there could be some sanity and scope for more films to be made even if couple of them bomb at the box office."

Who will be affected the most from the recession - actors, producers, distributors or exhibitors? Tanuj says, "With the credit crunch, the situation deteriorated as the principal revenue generators for a distributor became cash-strapped. Consequently boutique producers and actors on a honeymoon phase are among the most affected with the pricing nose-diving and an inevitable correction on the anvil,"

However the bigger belief is that the producers are the most affected lot. The distributors and exhibitors can throw their hands up and say 'sorry Fear factor in Indian cinema

I can't take your films as my funds have dried up'. But then what does the producer do? He has committed the film, paid people advances and gone ahead with shooting. He is in no position to force his colleagues to reduce their price, nor can he dump the project - in which case he loses both face and his investment.

As per industry buzz, the films where the buyers have withdrawn while the producers have gone ahead shooting based on the buyer's initial assurances include Vipul Shah's London Dreams, Sanjay Dutt - Akshay Kumar starrer Blue and all the three films starring Himesh Reshamiya.

Also affected are middle level workers and technicians. Their source of income has dried up with the producers appearing in a surrender mood.

But while on one hand we talk about cash-crunch and cost-cuttings, on the other hand we do see recent films doing encouraging business and the better ones like Golmaal Returns, Fashion and Dostana have even celebrated their grand success through lavish parties. Trade analyst Atul Kumar explains the paradox saying, "Celebrating success of Golmaal Returns and Fashion can be welcomed as an oasis in desert of crisis, which is looming largely over Bollywood. We need some reason to celebrate to forget tension. Otherwise global recession is definitely affecting our industry and don't be surprised to hear about some stars actually accommodating makers at much lower fees than their initial inflated price."

While adversely affecting the investing power, the recession is also inadvertently stabilizing Bollywood's internal economy. The early effects have already started showing but only time will define the long term damage.

Nevertheless as showman Raj Kapoor always maintained 'the show will continue to go on' in Bollywood. How else can you explain the likes of Bipasha Basu and Katrina Kaif being paid in crores for few minutes of performance on the New Year's Eve? That's what you call having one's cake and eating it too...

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